28 Feb Building a Custom Home: Tracking Expenses
Timberline Construction believes the financial aspects of your custom home project should be clearly outlined, tracked, and communicated. Cost estimates are finalized once the design, engineering, and specifications for your home are complete and building permits are approved. Organized in a “Job Binder,” bids and the “Cost Breakdown Spreadsheet” become the foundation for all cost tracking and client billing. As with all aspects of the construction process, we are diligent to communicate effectively with our clients regarding construction expenses to make the entire building process a positive experience.
Once the home design is complete, we go through a painstaking process to solicit multiple bids from trades-people and suppliers. The work done during the design phase to create a comprehensive, preliminary cost breakdown provides an excellent springboard for soliciting, negotiating, and accepting bids for all work and materials. During the bidding process, we meet with each trade and supplier to evaluate completeness of the bid and to negotiate better pricing. “Job Binders” with copies of all bids received are compiled and serve as a documentation and comparison tool for awarding bids.
We have established many relationships in the local building industry; these long-term relationships help us negotiate very competitive prices. Though keeping costs down is important, we focus on getting the best value and quality for our clients. This means we do not always award a job to lowest bidder, communicating closely with the client to make decisions in such cases.
The amounts of the bids deemed to be best suited to the project are entered into the Cost-Breakdown Spreadsheet for a Final Cost Estimate. The “Cost Breakdown Spreadsheet” is referenced in the construction contract, and both the “Job Binder” and the “Cost Breakdown Spreadsheet” become the basis for all job related billing. Trades-people and suppliers submit invoices to Timberline Construction which are coded to correspond with the Cost Breakdown Spreadsheet and entered into project accounting software (QuickBooks). We provide an updated version of this spreadsheet with each monthly invoice our clients receive. Every expense is supported by invoices from suppliers and subcontractors that are directly linked to the original bids.
Our preferred contractual arrangement is a Time and Materials Contract (cost plus). A copy is attached. This method allows for full transparency and the ability to keep the project moving as changes or adjustments arise. This typically eliminates the standard and often cumbersome and expensive change order process. We can address changes as formally as our clients’ are comfortable with. Small changes can be dealt with more efficiently through a less formal process, but if more substantial changes come about, we are more than willing to fully document cost implications before implementation of changed work.
Understanding that our clients’ peace of mind is critical to the building process, we make transparency a top priority. We are always happy to answer our clients’ questions about billing items. All documents are available to our clients at any time.